1 answer

1: Why do externalities in a market result in market failure (i.e., the market outcome doesn’t...

Question:

1: Why do externalities in a market result in market failure (i.e., the market outcome doesn’t maximize the total social surplus)?

2: Argue for two specific goods that are currently or should have a Pigouvian tax or subsidy imposed on them. What is the externality that is (or should be) being corrected for?


Answers

1. Externality is the costs or benefits of an economic transaction that falls on the third party who is not even involved in that production or Consumption process. Externality in a market causes market failure because due to externality, the price equilibrium of a product or service doesn't reflect the actual costs or benefits of that product or service.

.

Similar Solved Questions

1 answer
Use the following information to answer questions 1-3. The housekeeping services department of Ruger Clinic, a...
Use the following information to answer questions 1-3. The housekeeping services department of Ruger Clinic, a multispecialty practice in Toledo, Ohio, had $100,000 in direct costs during 2015. These costs must be allocated to Ruger’s three revenue-producing patient services departments using ...
1 answer
Write a program that uses String method regionMatches to compare two strings input by the user....
Write a program that uses String method regionMatches to compare two strings input by the user. The program should prompt the user to enter two strings, the starting index in the first string, the starting index in the second string, and the number of characters to be compared. The program should pr...
1 answer
Please answer 1a 1. Trace the steps of floating point addition and subtraction flowchart to perform...
please answer 1a 1. Trace the steps of floating point addition and subtraction flowchart to perform the following a, 12.625+ 7.5 b. 1150.62510 - 525.2510...
1 answer
21. Draw the condensed structural formula for the following amino acid at pH above 12.0: 22....
21. Draw the condensed structural formula for the following amino acid at pH above 12.0: 22. Draw the condensed structural formula for the following peptide, and give its three-letter and one-letter abbreviations: Serylalanylcysteine...
1 answer
A) "Simplicity of quantity theory of money is it's strength as well as it's weakness ."...
a) "Simplicity of quantity theory of money is it's strength as well as it's weakness ." Discuss. b) Discuss Say's law of markets. How far is it relevant to a modern society....
1 answer
2. An experiment is performed to measure the spring force constant (k) of an unknown spring....
2. An experiment is performed to measure the spring force constant (k) of an unknown spring. When a 100g +/- 1g mass (m) is hung from the spring stretches a length (x) 5cm+/-0.2cm. Based on these measurements, what is the uncertainty in the k? Suppose the experiment had been done with a 300g +/-1g m...
1 answer
Predict the major product for the following reaction: DIBAH OMe
Predict the major product for the following reaction: DIBAH OMe...
1 answer
List and explain the nutrition implications associated with a ketogenic diet
List and explain the nutrition implications associated with a ketogenic diet...
1 answer
A 2.0 kg ball hangs in an elevator as shown. The elevator has a downward acceleration...
A 2.0 kg ball hangs in an elevator as shown. The elevator has a downward acceleration of 2.5 A. Draw a free body diagram for the ball. In your diagram, draw the vectors to scale. (For example, a 2N force vector should be twice as long as a 1N force vector.) 60* 90 B. what is the total force on the b...
1 answer
We were unable to transcribe this imageSelect the correct answer below: z(t) = € 24 +...
We were unable to transcribe this imageSelect the correct answer below: z(t) = € 24 + 3. y(t) = t-3 z(t) = 2 + 3. y(t) = 1-3 O z(t) =t-3, y(t) = 2 + 3 Oz(t) = 224 + 3. y(t) = ? Given AABC below, with m/C 115°, a 6. and b 8. find the area of the triangle. Round your answer to the nearest ten...
1 answer
What is the molarity of an acetic acid solution that requires 40.0 ml of 0.100 M NaOH to titrate a 20.0 ml sample to the end point?
What is the molarity of an acetic acid solution that requires 40.0 ml of 0.100 M NaOH to titrate a 20.0 ml sample to the end point?...
1 answer
4. Capturing economies of scale is often offered as a reason for the consolidation of hospitals....
4. Capturing economies of scale is often offered as a reason for the consolidation of hospitals. In theory, if there are economics of scale, consolidation should result in cost savings for hospitals. What do the empirical studies mentioned in your text imply about consolidation for hospitals and cos...
1 answer
(Cost of secured short-term credit) The Marlow Sales and Distribution Co. needs $540,000 for the 3-month...
(Cost of secured short-term credit) The Marlow Sales and Distribution Co. needs $540,000 for the 3-month period ending September 30, 2015. The firm has explored two possible sources of credit a. Marlow has arranged with its bank for a $540,000 loan secured by its accounts receivable. The bank has ag...
1 answer
Electrochemical cells are arranged as depicted in the diagram above. What is the total electric potential...
Electrochemical cells are arranged as depicted in the diagram above. What is the total electric potential difference of this battery if each cell has an electric potential difference of 2.0 V? 20v 4.0 V e 6.0V 8.0 V none of the above...